Table Of ContentASSESSMENT OF THE NATURA 2000 CO‐FINANCING ARRANGEMENTS
OF THE EU FINANCING INSTRUMENT
A project for the European Commission
Noo070307/2010/567338/ETU/F1
March 2011
FINAL REPORT
M. Kettunen, O. Carter, S. Gantioler & D. Baldock (IEEP)
P. Torkler, A. Arroyo Schnell, A. Baumueller & E. Gerritsen (WWF)
M. Rayment, E. Daly & M. Pieterse (GHK)
Citation and disclaimer
This report should be quoted as follows:
Kettunen, M., Baldock D., Gantioler, S., Carter, O., Torkler, P., Arroyo Schnell, A.,
Baumueller, A., Gerritsen, E., Rayment, M., Daly, E. & Pieterse, M. 2011. Assessment
of the Natura 2000 co‐financing arrangements of the EU financing instrument. A
project for the European Commission – final report. Institute for European
Environmental Policy (IEEP), Brussels, Belgium. 138 pp + Annexes.
The contents and views contained in this report are those of the authors, and do not
necessarily represent those of the European Commission.
The Institute for European Environmental Policy (IEEP) is an independent institute
with its own research programmes. Based in London and Brussels, the Institute’s
major focus is the development, implementation and evaluation of EU policies of
environmental significance, including agriculture, fisheries, regional development
and transport.
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TABLE OF CONTENTS
EXECUTIVE SUMMARY.....................................................................................................................5
1 INTRODUCTION....................................................................................................................10
2 OBJECTIVES OF THE STUDY...................................................................................................14
3 APPROACH AND METHODS...................................................................................................15
3.1 ASSESSMENT OF THE CURRENT LEVEL OF EU CO‐FINANCING..............................................................15
3.2 EXISTING EVIDENCE ON THE IMPACTS OF EU CO‐FINANCING..............................................................17
3.3 OVERALL ASSESSMENT OF THE CURRENT EU CO‐FINANCING FRAMEWORK............................................18
3.3.1 Case studies illustrating the uptake of EU co‐financing in practise................................19
3.3.2 Gaps in financing different Natura 2000 related management measure.......................20
3.3.3 Shortcomings in the overall implementation of the EU co‐financing framework...........21
3.4 ASSESSING POSSIBLE MEASURES TO ADDRESS GAPS AND SHORTCOMINGS IN THE EU CO‐FINANCING
FRAMEWORK..........................................................................................................................................22
3.5 IDENTIFICATION AND ANALYSIS OF OPTIONS FOR THE FUTURE EU CO‐FINANCING OF NATURA 2000.........22
4 FUNDING AVAILABLE FOR NATURA 2000..............................................................................23
4.1 EU CO‐FINANCING FOR NATURA 2000 IN 2007‐2013...................................................................23
4.1.1 European Agricultural Fund for Rural Development (EAFRD).........................................23
4.1.2 European Fisheries Fund (EFF)........................................................................................31
4.1.3 Structural Funds and the Cohesion Fund........................................................................34
4.1.4 LIFE Programmes............................................................................................................37
4.1.5 7th Framework Programme for Research (FP7).............................................................43
4.2 PROJECTED EU FINANCING VS. ACTUAL EXPENDITURE......................................................................44
4.3 LEVEL OF EU FINANCING VS. ESTIMATED FINANCING NEEDS FOR NATURA 2000....................................45
4.4 NATIONAL FUNDING AVAILABLE FOR NATURA 2000........................................................................49
4.5 CONCLUSIONS..........................................................................................................................58
5 EXISTING EVIDENCE ON THE IMPACTS OF FINANCING NATURA 2000.....................................58
5.1 PRELIMINARY OBJECTIVE: FINANCING NATURA 2000 TO SAFEGUARD BIODIVERSITY...............................58
5.2 BROADER ENVIRONMENTAL AND SOCIO‐ECONOMIC BENEFITS OF NATURA 2000 FINANCING...................59
5.3 CONSIDERATION OF THE OVERALL COSTS AND BENEFITS OF FINANCING NATURA 2000 NETWORK.............64
5.4 THE ROLE OF DIFFERENT EU FUNDS IN DELIVERING ENVIRONMENTAL AND SOCIO‐ECONOMIC BENEFITS VIA
NATURA 2000.......................................................................................................................................65
5.5 CONCLUSIONS..........................................................................................................................67
6 ANALYSIS OF THE CURRENT EU FRAMEWORK FOR CO‐FINANCING NATURA 2000..................68
6.1 ASSESSMENT OF THE POSSIBILITIES FOR FINANCING NATURA 2000 UNDER THE CURRENT EU FUNDS.........69
6.1.1 European Agricultural Fund for Rural Development (EAFRD).........................................69
6.1.2 European Fisheries Fund (EFF)........................................................................................71
6.1.3 European Regional Development Fund (ERDF)...............................................................73
6.1.4 LIFE +...............................................................................................................................75
6.2 SUMMARY OF THE KEY INSIGHTS FROM THE NATIONAL LEVEL.............................................................76
6.3 GAPS AND SHORTCOMINGS IN THE EU CO‐FINANCING FRAMEWORK AND CONSTRAINTS ON USING THE
FRAMEWORK FOR NATURA 2000..............................................................................................................82
6.3.1 Gaps and shortcomings in the opportunities available to finance different Natura 2000
management measures................................................................................................................83
6.3.2 Comparing the gaps and the opportunities to finance Natura 2000 management with
information on costs.....................................................................................................................89
6.3.3 Constraints on using the EU co‐financing framework for Natura 2000..........................91
6.4 CONCLUSIONS..........................................................................................................................93
7 INNOVATIVE WAYS TO FUND NATURA 2000 – BROADENING & COMPLEMENTING THE EU CO‐
FINANCING FRAMEWORK..............................................................................................................94
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7.1 KEY TO INNOVATION: IDENTIFYING THE LINKS BETWEEN ECOSYSTEM SERVICE AND MANAGING NATURA 2000
95
7.2 POTENTIAL USE OF NEW, INNOVATIVE FINANCING INSTRUMENTS FOR NATURA 2000 NETWORK............100
7.3 LIMITATIONS OF USING INNOVATIVE INSTRUMENTS.......................................................................101
7.4 INNOVATIVE USE OF EXISTING EU INSTRUMENTS...........................................................................108
7.5 CONCLUSIONS........................................................................................................................110
8 POSSIBILITIES TO ADDRESS THE GAPS IN AND CONSTRAINTS ON USING THE EU CO‐FINANCING
FRAMEWORK FOR NATURA 2000.................................................................................................110
8.1 POSSIBLE KEY MEASURES TO ADDRESS THE GAPS IN AND CONSTRAINTS FOR USING THE EU CO‐FINANCING
FRAMEWORK........................................................................................................................................110
8.2 ADDRESSING THE LIMITATIONS AND GAPS IN FINANCING DIFFERENT MANAGEMENT MEASURES..............112
8.3 ADDRESSING BROADER SHORTCOMINGS IN THE UPTAKE OF THE EU CO‐FINANCING..............................114
8.4 CONCLUSIONS........................................................................................................................115
9 IDENTIFICATION AND ASSESSMENT OF OPTIONS FOR THE FUTURE EU CO‐FINANCING
FRAMEWORK..............................................................................................................................116
9.1 OPTIONS FOR THE FUTURE EU CO‐FINANCING FOR NATURA 2000...................................................116
9.2 HORIZONTAL OPTIONS TO SUPPORT THE FUTURE EU CO‐FINANCING FRAMEWORK...............................118
9.3 ANALYSIS OF DIFFERENT OPTIONS FOR NATURA 2000 FINANCING....................................................122
9.3.1 Capacity to successfully address gaps and constraints.................................................123
9.3.2 Compatibility and synergies with and impacts on the other relevant EU policy objectives
124
9.3.3 Compatibility with the EU budget review & general principles....................................125
9.3.4 Capacity to deliver broader environmental and socio‐economic benefits....................126
9.4 CONCLUSIONS........................................................................................................................131
10 CONCLUSIONS – THE VALUE ADDED OF FINANCING NATURA 2000......................................133
11 REFERENCES.......................................................................................................................134
ANNEXES
Annex 1. National funds for Natura 2000 – insights from a number of EU Member States
Annex 2. Case studies for using different EU funds for co‐financing Natura 2000 at the Member State
level
Annex 3. Analysis of the gaps in financing different Natura 2000 management activities
Annex 4. Mapping innovative financing instruments against Natura 2000 management activities
Annex 5. Analysis of the possibilities for improving the EU co‐financing framework for Natura 2000
Annex 6. Analysis of the different future options for co‐financing Natura 2000
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EXECUTIVE SUMMARY
THE EU CO‐FINANCING FRAMEWORK FOR NATURA 2000 – LESSONS LEARNED
This study confirms that, despite the increased effort and some good examples on
financing Natura 2000 from the Community funds, the existing EU co‐financing
framework is not fully effective. The problem arises from both gaps in the framework
and significant constraints that make it difficult to use to its full potential.
The funding allocated to Natura 2000 actions appears inadequate, given the
estimated need for resources. Under the current EU co‐financing model, Natura
2000 and wider biodiversity actions are eligible for funding from a diversity of
Community funding instruments. However, only a low level of financial resources is
directly and specifically allocated to support the management of the Natura 2000
network.
The study reveals that in most Member States there seems to be more funding
provided through the EU financing instruments than through national funding
mechanisms. This highlights the importance of ensuring that the EU co‐financing
framework provides sufficient opportunities for Natura 2000 and that these
opportunities are taken up in the most effective manner (see below). It also indicates
that significant efforts are needed to further increase the national support to Natura
2000 ‐ as it is not expected that Community funding (even when complemented by
national co‐funding) will ever fully cover the total costs of managing the network.
The lack of transparency and detail in the EU funds’ budgetary allocations makes it
difficult to estimate the overall EU contribution towards Natura 2000. However, this
study estimates that the financial allocations for Natura 2000 from the EU budget
are between 550 – 1150 million EUR / year1. This range should be considered a
rough approximation only. The estimated figures represent only 9‐19 per cent of the
estimated financing needs of 5.8 billion EUR / year. In addition, past experience
suggests that part of the allocated support will not be realised in practise, decreasing
these figures further.
However, it is also important to note that funding is often most relevant for one‐off
costs, which are estimated to be around a third of the total funding needs for Natura
2000. According to this study, a number of these one‐off costs are currently eligible
for EU funding (see below). The remaining costs relate to recurrent costs, some of
which (e.g. staff costs) are generally deemed in line with the principle of subsidiarity
to be more appropriately funded by the Member States. In other words, EU funding
1 This mainly refers to the Community funding (i.e. excluding Member States share), see Chapter 4 for
detailed calculation and underlining assumptions. Consequently, the total overall financial
contribution to Natura 2000 under the EU co‐financing framework would be roughly around 1.25 –
1.5 times the estimated range (i.e. assuming 25 – 50 per cent co‐financing from national funds).
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along with the required national co‐financing seems to play an important role in
contributing towards the eligible one‐off costs of Natura 2000.
These figures should also be seen in the context of a possible increase in the overall
funding of Natura 2000 over time. National administrations (e.g. in the new Member
States) are still developing their management practices and their capacity for
spending in this area and this could indicate that in the future the level of financing
available for Natura 2000 increases as a result of increasing experience and
establishing effective procedures for funding.. It is unclear, however, to what extent
these developments will help to meet the estimated financing needs for Natura
2000.
There are gaps in and significant constraints to using the EU co‐financing
framework for Natura 2000, contributing to the financing gap. The relatively small
contribution of the EU budget to Natura 2000 can be explained by a number of
factors. Even though a rather wide range of Natura 2000 measures are eligible for
financing under the different EU funds, some gaps still remain. The main eligibility
gap relates to ongoing management and monitoring of Natura 2000 sites whereas
activities linked with one‐off investments and remaining designations seem relatively
well covered. This result is somewhat worrying since ongoing management activities
(especially habitat management) account for the most significant costs in the context
of implementing the network. In general, opportunities to fund ongoing
management of Natura 2000 sites are available especially for agricultural and
forestry areas whereas the possibilities for funding such activities in other areas are
more limited (e.g. inland waters, wetlands, marine areas and other terrestrial sites).
The explanation for the relatively limited possibilities for co‐funding ongoing
activities is that the EU budget is not aimed at financing certain actions which are
more appropriately carried out by national/regional administrations. These include,
for example, establishing and running management bodies). Such actions should be
covered by national spending.
In addition, a range of constraints hinder the uptake of opportunities provided by the
EU co‐financing framework. Member States are not obliged to draw down EU
funding, they can only be encouraged to do so, although this encouragement may be
amplified by pressure from the Commission to accelerate implementation of Natura
2000 on the ground. One of the most obvious shortcomings in the current
framework is the absence of pressure on Member States to allocate sufficient funds
to Natura 2000 in their national Operational Programmes (OPs) supported by the
Structural Funds. This leaves Natura 2000 to compete with a range of different policy
goals, such as support to economic activities and infrastructure. Despite the OPs’
environmental and biodiversity rhetoric, in reality, Natura 2000 is often a secondary
priority for funding. Also, foreseen budget allocations for Natura 2000 do not
guarantee that this money will be fully taken up by stakeholders in practise.
Furthermore, the lack of coherence, coordination and planning in Member States on
how to use different EU and national funding sources makes it difficult to form an
overall picture of the actual financing needs and how these needs should be met.
Finally, at the level of stakeholders, the lack of capacity and know‐how on access to
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EU funds and a (perceived) high administrative burden deters EU co‐financing
opportunities.
Given these issues, continuing to finance Natura 2000 by a ‘business as usual’
approach puts fully meeting the needs of the network at risk. This in turn would
jeopardise reaching the future objectives of EU biodiversity policy, to halt the loss of
and restore biodiversity and ecosystem services.
ADDRESSING THE GAPS AND CONSTRAINTS: TOWARDS A MORE EFFECTIVE CO‐
FINANCING OF NATURA 2000
Future progress in improving the EU co‐financing for Natura 2000 depends on an
increase in political will at the Member State level, a willingness to spend national
resources and the availability of EU funds.
Increasing available, clearly allocated opportunities for Natura 2000 under the EU
funds, improving transparency and enhancing coordination are considered to be
the most effective ways to improve the Community co‐financing framework. In this
context, one option is to address the identified gaps in funding opportunities (i.e. the
eligibility for funding). These include in particular securing better funding for ongoing
management and monitoring of Natura 2000 sites, e.g. measures aimed at
conserving species and habitats with no clear connection to broader regional or rural
development. Continued or increased support could also be made available to
specifically support the development of Natura 2000 management plans to pave the
way towards a more coherent and transparent way of utilising the co‐financing
framework (see below). Finally, allowing the EU funds to also support activities and
processes aimed at monitoring both the use of funds and performance of funding
(e.g. broader monitoring schemes) could also be considered. This would help to
address the current deficit in monitoring performance of biodiversity goals.
Adoption of clearer priorities and dedicated earmarking of funds for Natura 2000 at
the EU level, i.e. in the key Regulations, would help to ensure more systematic and
targeted uptake of EU funding at the national level across the different funds. Such
measures would also reduce competition with other political priorities that currently
crowd out funding for Natura 2000. In practise these measures could, for example,
include adopting more targeted objectives, creating dedicated budget lines and
introducing obligations to allocate financing towards Natura 2000.
On a more operational level, simplifying and mainstreaming the application and
administrative processes related to the use of EU funds could diminish the need for
capacity building and lower the administrative burden on stakeholders, facilitating
greater uptake. Also, a critical review of the technical arrangements and
requirements for accessing the EU funds could reduce unnecessary barriers for
stakeholders (e.g. the level of required co‐funding and reporting burden).
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Enhancing the coordination of financing Natura 2000 via the establishment of
Prioritised Action Frameworks (PAFs) at national level would be a key improvement
to the current framework. PAFs are foreseen to lead to a clearer identification of
financing needs and a more systematic use and uptake of different EU funds for
Natura 2000. By improving coherence and coordination, PAFs could also help to
improve, clarify and build‐up stakeholder know‐how regarding which funds are
available for different Natura 2000 management activities. This type of enhanced
coordination at the national level could also indirectly reduce administrative burdens
for key stakeholders. Finally, PAFs could (directly or indirectly) support and/or
initiate monitoring of EU funds’ performance in delivering biodiversity goals or, at
least, help to identify funding to support these monitoring activities. Naturally, for
PAFs to be developed there is also a need to ensure the existence of appropriate
management plans for Natura 2000 sites.
Another more ambitious option would be a dedicated fund for Natura 2000, that
would minimise the competition between different sectoral policy priorities and
guarantee easier, more straight forward access for funding. Such a dedicated fund
would also simplify the EU co‐financing framework. However, financing Natura 2000
from a single fund requires securing a significant amount of resources under one
financing instrument. In general, financing Natura 2000 via a single fund is a rather
risky approach as it significantly depends on the political will for its establishment
and implementation (e.g. securing adequate national resources for co‐financing).
Capacity building is needed to guarantee the most optimal and effective use of the
EU co‐financing framework. The analysis of existing shortcomings identifies the lack
of stakeholder capacity as one of the key reasons for preventing them to apply for
EU funding for Natura 2000. This leads to a lower uptake of funding as appropriate
proposals are not presented. Consequently, further support for capacity building
seems to remain a requirement in the future. Furthermore, it appears that improving
stakeholders’ capacity to access and effectively utilise different EU funding
opportunities can also (directly and indirectly) help to address a number of other
current shortcomings in the EU co‐financing framework for Natura 2000. For
example, capacity building can contribute to enhancing stakeholders’ ability to seek
new, more innovative sources for funding, thus increasing the overall resources
available and securing the financing of Natura 2000 in a long term. Capacity building
at the level of relevant government officials (including different ministries) could
help to improve integration of Natura 2000 into relevant EU funds at the national
level and also possibly improve coordination and cooperation between relevant
administrative bodies. Also, increasing stakeholders’ capacity to deal with EU funds is
foreseen to help stakeholders to deal more effectively with the related
administrative.
Based on the analysis carried out in the context of this study, improving the existing
integrated approach to co‐financing Natura 2000 seems to provide the most
politically feasible, effective and risk‐averse way forward.
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In particular, a combination of enhancing the available funding opportunities and
improving the availability and targeting of financial allocations, as well as their
transparency (e.g. monitoring the actual spending), supported by a coherent
implementation at the national level via Prioritised Action Frameworks seems likely
to be the most promising avenue for co‐financing Natura 2000 in the future.
In addition, it is foreseen that support for capacity building and exploration of
innovative resources (e.g. innovative ways to use the existing funds and the
development of new mechanisms for financing) could help.
Finally, past experiences show that LIFE funding – albeit limited in terms of resources
– plays an important strategic role in supporting the management of the Natura
2000 network. Therefore, the continuation and enhancement of LIFE / LIFE‐like
funding (e.g. by increasing the total budget available) would be an integral
component of the EU co‐financing framework also in the future.
POSSIBILITIES TO COMPLEMENT THE FUTURE EU CO‐FINANCING FRAMEWORK
WITH INNOVATIVE FINANCING MECHANISMS
There is scope to complement and add to the existing funding streams for Natura
2000 with innovative thinking and new funding mechanisms. While not improving
the level of earmarked opportunities for Natura 2000, innovative application of the
existing EU funds with links to ecosystem services and related socio‐economic
benefits can help to better use and access existing EU co‐financing opportunities.
These links (e.g. the role of Natura 2000 in recreation & tourism, water retention &
purification, risk management) can facilitate the integration of Natura 2000 into
different operational programmes at national and regional level. For example,
piloting sustainable fisheries management projects, nurseries and no‐take zones in
the context of EFF could improve the uptake of this fund for Natura 2000. Similarly,
Natura 2000 could be used as a corner stone for green infrastructure that forms a
basis for sustainable regional development in the context of EU Cohesion Policy.
There is also scope to complement the existing funding for Natura 2000 with more
innovative financing instruments, for example by engaging more with the business
and financial sectors. As for the use of new and innovative instruments, this would
mean using more private sector resources alongside EU and national public funding.
A number of possibilities exist, for example through creating dedicated programmes
for green infrastructure in the context of the EU Cohesion Policy. In principle, the
development of innovative financing instruments could also be actively supported by
EU sectoral polices. For example, funding under EU Cohesion Policy could be made
available to support pioneering and testing innovative payment schemes that benefit
both sustainable socio‐economic development and biodiversity, including Natura
2000.
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1 INTRODUCTION
The Birds and Habitats Directives form the key legislative basis for biodiversity
conservation in the EU. One of the main aims of these Directives is to establish a
coherent network of protected areas, designed to safeguard the habitats and species
of greatest conservation value within Europe, i.e. the Natura 2000 network.
As the process of implementing the Natura 2000 network continues, Member States
now increasingly pursue the objectives in the legislation by the means they think
best, with the requisite responsibilities distributed largely according to their own
preferences, for example between national and regional authorities. In the course of
doing so they make decisions about the resources to be devoted to Natura 2000 in
the shape of funding for the public authorities involved, capital expenditure on
public works and private investment, site management costs, expenditure on
research, advice, monitoring, education and training etc. The levels of expenditure
on these activities vary between Member States, reflecting not only the ‘true need’
for active intervention in order to establish and manage the network but also the
other pulls on public expenditure. The latter include the pressures exerted on the
government and public authorities by different interests, stakeholders and
competent authorities as well as the European Commission and the political
importance of the issue in the country or region concerned. Several other factors will
also be relevant, including the institutional capacity to identify needs and requisite
actions to achieve favourable conservation status, the availability of skills and
appropriately trained staff and the ability and willingness of relevant stakeholders to
take part in management actions.
The roles and responsibilities for financing the management of Natura 2000 network
vary. In general, Member State governments themselves play a key role in meeting
the costs of establishing and running the network. In some cases there may be a
significant contribution from NGOs and benevolent institutions, active cooperation
by land managers on a purely voluntary basis, helpful contributions by public
agencies including the armed forces, relevant activity by water suppliers managing
catchment areas and similar undertakings which do not require direct funding from
the state budget. There is also an increasing scope for the private sector to make a
bigger contribution and there is a growing interest in novel instruments which could
draw on private sector funding.
Given that the Natura 2000 network is an EU level initiative set to implement agreed
Community‐wide goals for biodiversity conservation the implementation of the
Natura 2000 network is eligible for funding from the EU budget (as according to the
Habitats Directive Article 8). In principle, this is seen warranted as biodiversity values
are commonly considered to be a public good of fundamental EU‐wide importance
that merit being addressed at the Community level, e.g. supported by the common
budgetary resources (Kettunen et al. 2009a).
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Description:project for the European Commission – final report. Institute for .. initiate monitoring of EU funds' performance in delivering biodiversity goals or, at.
